EUROASIA PHILIPPINES, INC. AND MARTHA H. RESURRECCION, PETITIONERS, VS. NATIONAL LABOR RELATIONS COMMISSION AND FRANCIS R. JOVEN, RESPONDENTS.

Euroasia Philippines versus National Labor Relations Commission

The Case

This is a petition for certiorari filed by Euroasia Philippines, Incorporated and its president, Martha Resurreccion, against the National Labor Relations Commission and the overseas worker Francis Joven. The dispute is a money claim by a land-based overseas Filipino worker assigned to Madagascar, who says his employer underpaid his salary and withheld contractual benefits. The case matters because it tells us which law governs the pay of a land-based overseas worker, and because it shows that the factual findings of labor tribunals, though generally respected, will be struck down when they capriciously ignore evidence of considerable importance.

Procedural History

Francis Joven filed an amended complaint for underpayment of salary and wages, non-payment of unused vacation leave, retention bonus, refundable trouble fund, damages, and attorney's fees before the Labor Arbiter. The Labor Arbiter ruled in his favor, holding that the employer failed to refute the claims, and awarded salary differentials, vacation leave pay, retention bonus, and the refundable trouble fund, while denying the claim for unpaid August salary and overtime pay. On appeal, the National Labor Relations Commission affirmed with modification, adding a holiday premium pay, adopting the employer's own computation for vacation leave and retention bonus, granting the August salary, and adding attorney's fees of ten percent of the total award. The Commission denied the employer's motion for reconsideration. The employer then went to the Supreme Court by petition for certiorari under Rule 65, alleging grave abuse of discretion amounting to lack or excess of jurisdiction.

Facts

Euroasia Philippines, Incorporated supplies skilled and professional workers to industries abroad. On June 11, 2010, it entered into a twenty-four month contract of employment with Francis Joven, assigning him as Heating Ventilation and Air Condition Foreman at its foreign client's project site in Madagascar. His monthly base salary was 1,400 United States dollars for 260 hours, consisting of 10 hours a day and 6 days a week. The contract guaranteed that the 260-hour monthly pay would be paid even if actual hours of work were less, and provided vacation leave, holiday pay at twice the basic pay, and rest day pay at 1.5 times the basic pay, if actual work was rendered. In 2012 the contract was extended for another 12 months and his salary increased to 2,000 United States dollars.

Upon returning to the country after his contract ended, Joven filed his complaint, claiming underpayment of salary, unpaid retention bonus, unused vacation leave credits, the refundable trouble fund, and unpaid August salary. The employer countered that it never defaulted, that its computation followed the contract and company standards, and that holiday pay was credited at 200 percent of the daily wage.

The Labor Arbiter granted the claims for failure of the employer to refute them, since payroll records and similar documents are in the employer's custody and control. The Commission affirmed with modification and added holiday premium pay. Before the Supreme Court, the employer insisted that the holiday pay was already included in the 260 hours guaranteed by the contract, and that attorney's fees were unjustified.

Issues

• Whether or not the National Labor Relations Commission committed grave abuse of discretion in awarding a salary differential to Francis Joven for hours worked on holidays.
• Whether or not the National Labor Relations Commission committed grave abuse of discretion in ordering the employer to pay attorney's fees.

Applicable Provisions

Section 2 of Rule I, Part V of the 2002 POEA Rules and Regulations Governing the Recruitment and Employment of the Land-Based Overseas Workers provides:

SECTION 2. Minimum Provisions of Employment Contract. — Consistent with its welfare and employment facilitation objectives, the following shall be considered the minimum requirements for contracts of employment of land-based workers: a. Guaranteed wages for regular work hours and overtime pay, as appropriate, which shall not be lower than the prescribed minimum wage in the host country, not lower than the appropriate minimum wage standard set forth in a bilateral agreement or international convention duly ratified by the host country and the Philippines or not lower than the minimum wage in the Philippines, whichever is highest; b. Free transportation to and from the worksite, or offsetting benefit; c. Free food and accommodation, or offsetting benefit; d. Just/authorized causes for termination of the contract or of the services of the workers taking into consideration the customs, traditions, norms, mores, practices, company policies and the labor laws and social legislations of the host country; e. The Administration may also consider the following as basis for other provisions of the contract: 1. Existing labor and social laws of the host country; 2. Relevant agreements, conventions, delegations or resolutions; 3. Relevant bilateral and multilateral agreements or arrangements with the host country; and 4. Prevailing condition/realities in the market.

This fixes the minimum standards for land-based overseas employment contracts, which the parties' stipulations must respect.

Section 3 of the same Rule provides:

SECTION 3. Freedom to Stipulate. — Parties to overseas employment contracts are allowed to stipulate other terms and conditions and other benefits not provided under these minimum requirements; provided the whole employment package should be more beneficial to the worker than the minimum; provided that the same shall not be contrary to law, public policy and morals, and provided further, that Philippine agencies shall make foreign employers aware of the standards of employment adopted by the Administration.

This authorizes the parties to fix their own terms, so the Court resolves the holiday pay question according to the employment contract itself.

Ruling

On the first issue, the Court held that the petition is partly granted. A land-based overseas worker is governed primarily by the POEA Rules and Regulations and by Republic Act Number 8042, the Migrant Workers and Overseas Filipinos Act of 1995, and the parties may stipulate terms under the freedom to stipulate. The Court found that the rulings on monthly paid employees using the 313 or 314 divisor were inapplicable, because Joven's salary was governed not by the Labor Code but by the terms and conditions of the employment contract. Examining the statement of earnings and deductions, the Court found substantial evidence that the holiday premium pay had in fact been paid. The deficiency in regular hours was simply carried over to the holiday pay multiplied by two, or to the rest day multiplied by 1.5. In the May 2012 payslip, for instance, only 240 regular hours were entered, and the remaining 20 hours were credited to the holiday portion at double the regular rate. The Court therefore held that the Commission committed grave abuse of discretion in declaring, without basis, that Joven's salary was diminished every time he worked on a holiday. On the other benefits, the Court sustained the Commission's findings, since the employer admitted willingness to release them.

On the second issue, the Court sustained the award of attorney's fees, quoting its earlier ruling:

in actions for recovery of wages or where an employee was forced to litigate and thus incur expenses to protect her rights and interests, even if not so claimed, an award of attorney's fees equivalent to ten percent (10%) of the total award is legally and morally justifiable

The Court stressed that factual findings of labor tribunals are generally accorded great respect and finality, but they are not infallible, and may be disregarded when the administrative body capriciously, whimsically, or arbitrarily disregarded evidence of considerable importance that is crucial or decisive of the controversy.

Doctrine

A Filipino worker who contracts employment overseas is primarily governed by the POEA Rules and Regulations and by Republic Act Number 8042. For land-based overseas workers, the employment contract, executed under the freedom to stipulate, governs the payment of salary and benefits, and the Labor Code rules on monthly paid employees do not apply. The factual findings of labor tribunals are generally respected and final, but they are not infallible and will be set aside when grave abuse of discretion is shown, as when the tribunal capriciously disregarded evidence of considerable importance. Attorney's fees equivalent to ten percent of the total award are legally and morally justifiable in actions for recovery of wages, even if not claimed.

Disposition

The petition was partly granted; the Commission's decision and resolution were affirmed with modification, deleting the award of salary differential of 106,252.33 pesos for lack of factual and legal basis, and recomputing the attorney's fees at ten percent of the total award.

Remember This

Memorize this line: the factual findings of labor tribunals are not infallible and may be set aside when they capriciously disregard evidence of considerable importance. Examiners use this case to test the land-based overseas worker's governing law and the grave abuse of discretion exception to the finality of administrative findings.